Understanding the Positive Cash Flow Margin concept
by Glen Becker
God designed this world so that you require food, clothing and shelter to live. That means that it is impossible to save 100% of your income. So, you need to plan how much to give, how much to spend and how much to use for other purposes.
There are certain priority payments which must come first: tithes, any giving you have committed to the Lord to make, your taxes, and the minimum payments on debts. Beyond these, there are the regular expenses of housing, food, clothing, etc. You have some discretion on these, but as God planned, you do need these things. Income that is not used for these purposes is available for meeting your financial goals: faster debt repayment, building a cash reserve for emergencies, savings for retirement or special purchases, and building an estate to leave to your heirs.
This available income is called “cash flow margin.” You can think of it as your freedom of choice. If your cash flow margin is:
Positive: You have real choices on what to do with your money.
Zero: You have no choice—it’s all gone.
Negative: You are forced to borrow more each month.
Thus, cash flow margin is all about choice. Sadly, most people do not know their cash flow margin. If you do not know yours, the money will disappear by default. Usually the only way to have a positive cash flow margin is to plan to have one. That requires listing your income and expenses, doing the math, and seeing the number for yourself.
God already knows the number, and He wants you to know it, too. Proverbs 27:23 (NIV) says, “Be sure you know the condition of your flocks, give careful attention to your herds.” This includes knowing whether there is enough food to feed the flock. In the same way, you must know whether your spending is allowing you to move ahead financially or not. If not, you can adjust your spending plan until you are happy with the result.
You want to achieve your financial goals. Planning for a positive cash flow margin is the practical way to begin. You will then be able to use the money according to your priorities.